Appreciation Programme Participatory Social Audit: A Tool ...pria-academy.org/pdf/Module_I_Social_Audit_An_Introduction.pdf · social accountability, especially after independence

Module – 1 Social Audit: An Introduction 1

Participatory Social Audit: A Tool for Social Accountability

©PRIA International Academy 2013

Appreciation Programme

Participatory Social Audit:

A Tool for Social Accountability

Module – I

The development of Appreciation Programmes has been made possible through the

technical and financial support of DVV International, Ford Foundation, Rockerfeller

Foundation, Swiss Development Corporation, University of Victoria (UVic) and PRIA




Content Developers And Authors:

Dr. Alok Pandey has a background of welfare economics and obtained his Ph. D. from

the Govind Ballabh Pant Social Science Institute, Allahabad, Uttar Pradesh in 2001. He

has more than 14 years of work experience in the field of local self-governance and

decentralised planning. He has published more than 40 articles in journals, newspapers

and magazines. Dr. Pandey is an experienced trainer, having conducted training

programmes for various stakeholders on issues of democratic local governance, social

audit, decentralised district planning etc.

Mr. Binoy Acharya holds an M.Phil. in Sociology from School of Social Science,

Jawaharlal Nehru University, New Delhi. He is involved in programmes on capacity

building, promotion of local governance, research and advocacy and rehabilitation of

earthquake affected areas of Gujarat. He closely works with grass root developmental

groups, government organisations and international NGOs.

Dr. Rajesh Tandon is president-founder of Participatory Research in Asia (PRIA), a

voluntary organisation providing support to grass roots initiatives in South Asia. Dr.

Tandon is an internationally acclaimed leader and practitioner of participatory research

and development. He has served on numerous government task forces and committees

both nationally and internationally. He is also the UNESCO Co-Chair for community

based research and social responsibility in higher education.

Content Packaging:

Ms. Aparna

Ms. Sonia Preisler




Conceptualization And Technical Expertise By:

Ms. Apoorva Sharma- Communication and visual branding

Ms. Martha Farrell- Adult education and online distance learning

Mr. Prashant Dambhale- Technological platforms for delivery

Acknowledgements:

Ms. Anupma Gajwani- Visualizing and setting up of MOODLE platform

Mr. Sujit Kumar Sourav and Mr. Ranjan Sinha- Backend technical support for the

running of the courses

Mr. M D Joseph - Coordination and secretarial support




Table of Contents

S. No. Topic Pg. No.

Unit 1 Introduction And Objectives 5

1.1 Introduction 5

1.2 Objectives 6

Unit 2 Audit And Its Types 7

2.1 Regulatory Audit 8

2.2 Performance Audit 8

2.3 People’s Audit 8

Unit 3 Social Audit And Its Relevance 9

3.1 History Of Social Audit 9

3.2 Types Of Social Audit 10

3.3 Relevance Of Social Audit 12

Summary 15

References 16




Unit 1: Introduction And Objectives

1.1 Introduction

With growing availability of information, people in different parts of the globe want to

become part of the governance in their respective country and area. They want

accountability in all service delivery systems and establishments made to deliver the

services, for which expenses are being made from the exchequer. Currently, social

audit is considered an important tool to ensure accountability and transparency in the

system of governance. In this context many people consider social audit as a panacea

for every kind of economical misuse. However, there are many people who are ignorant

of the procedures for conducting a social audit successfully; there exists a lot of

confusion, chaos and even manipulation in its process.

This Module is divided into four units. The first unit provides an overall introduction to

the Module and states its objectives. The second unit focuses on the relevance of

social audit in social development. The third unit briefly explains the various types of

audits. Finally, the fourth unit outlines the statutory provisions available in India to

promote social accountability.




1.2 Objectives

This Module will help learners to:

Develop a perspective on audits in general

Understand relevance of social audit

Understand different types of audits including social audit,




Unit 2: Audit And Its Types

The word ‘Audit’ came from the Latin word audire, which means "to hear". The general

definition of an audit is an evaluation of a person, organization, system, process,

enterprise, project or product. The term most commonly refers to audits in accounting,

but similar concepts also exist in project management, quality management, and energy

conservation. Today, social audit refers to an inspection of financial statements to

ensure that they are genuine. It also informs the stakeholder whether her financial

statement complies with the accepted accounting standards. There are, basically, two

types of audits - internal audit and external audit.

In the Indian context, audits can be broadly divided in terms of whether it is (a)

Government audit (b) People’s audit. A government audit is conducted by government

agencies or an agency empanelled by the government (e.g. the Institute of Chartered

Accountants of India). Here it is useful to mention that the Comptroller and Auditor

General (CAG) of the Government of India is the l central government agency for

conducting audits. The CAG conducts two types of audits – Regulatory and

Performance audits.

Countries like Nepal, Pakistan, Sri Lanka, Philippines, Finland, South Africa, Zimbabwe

all have Auditor Generals, as the central government agency for conducting audits; , in

Bangladesh and Indonesia the agency is the Comptroller and Auditor General, who




have similar provisions, as the Auditor General, through which they conduct regulatory

audits in their respective countries.

2.1 Regulatory Audits occur in two systematic steps. First, the compliance audit

ascertains whether the expenditure was authorized, whether it was in conformity with

the prescribed rules and regulations for spending public money and whether it was done

with the approval of the concerned authority. In the second step, the financial audit

analyses the financial statements to establish whether acceptable accounting standards

for financial reporting and disclosure have been met.

2.2 Performance Audit is to assess that the programmes or schemes have achieved

the objectives envisaged, at the lowest cost, and have given the intended benefits. It

may be observed that, as audits conducted by government agencies do not have any

role for people affected by the project/ schemes/ programmes audited. There emerged

a demand for participatory audit (or people’s audit), along similar lines to participatory

monitoring.

2.3 People’s Audit is based on the principle that people’s participation can enhance

systems of good governance. People’s audit is therefore a process and not an end in

itself. In any democratic system, public funds ultimately belong to the people and people

should have a large role to play in their utilization. The government machinery must be

held accountable for the manner in which it spends public money. People’s audit

provides a way to measure, understand, report and improve the social and ethical

performance of the system. Social Audit is based upon this approach.




Unit 3: Social Audit And Its Relevance

3.1 History Of Social Audit

Charles Medawar pioneered the concept of social audit in 1972 with the application of

the idea in medicine policy, drug safety issues and on matters of corporate,

governmental and professional accountability. So the concept of social audit originated

from the concept of Corporate Social Responsibility (CSR) followed by corporate

entities around the globe. The term social audit refers to the audit of the social

responsibility role performed by a corporate entity. Social auditing provides an

assessment of the impact of an organisation’s non-financial objectives through

systematically and regularly monitoring its performance and the views of its

stakeholders.

Again, if we take examples from India, there are number of documents that talks about

social accountability, especially after independence. Ashok Mehta Committee (formed in

December 1977) made 132 recommendations in its report (submitted in August 1978).

One of the recommendations was related to establishment of a cell (comprising of a

district level agency and a committee of legislators) to conduct social audit on a regular

basis, to assess whether the funds allotted for the vulnerable social and economic

groups are actually spent on them. Defining social audit, the committee said that the

audit would not be in nature of financial audit or even of general programme




discussions. Making it more specific, the committee emphasised that records would be

subjected to close scrutiny and the criterion would be not financial disbursement but

whether the intended benefits had reached the target groups.

In India, civil society organisations (CSOs) like Mazdoor Kissan Shakti Sangthan

(MKSS), Parivartan, etc. facilitated people’s audit or public audit, particularly of some

developmental schemes, in the last decade of the 20th

century. These audits played a

crucial role in educating people and enabled them to put pressure on the political parties

and the administrative system to take corrective measures. The response of the

administration varied, as these audits did not have legal sanctions. Nevertheless, these

early processes paved the way for the introduction and acceptance of social audit.

3.2 Types Of Social Audit

Guidelines and circulars of the National Rural Employment Guarantee Act (NREGA)

provide an institutional design and create space for the community to participate in

ensuring transparency and accountability. However, to make these designs operational

and effective, some amount of facilitation is needed. In some states this facilitation has

been carried out by government agencies themselves and in others by civil society

organisations and academic and research institutions.

During the last five to six years, there have been different approaches to conduct social

audit in India. The first one is to conduct in a it in a campaign mode; this served the dual

purpose of raising awareness of the general public, which was then followed by village,




block or district level sharing. For example, the mass social audit that took place in

Dungarpur, Rajasthan in April 2006, was used as a learning in Andhra Pradesh, where

thirty-one NGOs and CSOs network came together with the Department of Rural

Development, Government of Andhra Pradesh to conduct a mass social audit through a

padayatra (street march) in Ananthapur district of the state in August 2006 (CEC 2006).

The second approach, mainly facilitated by government agencies, is to collect

information on the basis of a pre-designed format for all Gram Panchayats of the

district. Reports are then read in the Gram Sabha and also consolidated at the block

and district level to be transmitted to higher authorities. States like Jharkhand, where

Panchayats had not been constituted, adopted this approach.

The third approach, usually facilitated by CSOs, is done in selective Gram Panchayat

and Blocks and data is collected with the help of volunteers, largely outsiders, and

presented at the block level and district level public hearings attended by government

officials. This approach has been adopted by organisations like Astha, MKSS, and

activist-academicians such as Jean Dreze etc., during social audits in Uttar Pradesh,

Jharkhand, Chhattisgarh, Rajasthan etc.

Finally, some groups have adopted an approach where the social audit is initiated by

the Gram Panchayat, and facilitated by CSOs. A committee consisting of residents of

that Gram Panchayat collects information and presents it in the Gram Sabha. The

Rajasthan Government, in its guidelines, has adopted this approach. PRIA too has




adopted this approach in those Gram Panchayats where it is working intensively (PRIA

2007).

3.3 Relevance Of Social Audit

The people in coordination with the local administration conduct social audits. It is a

process in which the details of resources, both financial and non-financial used by

public agencies for development initiatives are shared with the people. The sharing

takes place through a public platform. The process provides users an opportunity to

scrutinise developmental activities and allows people to enforce transparency and

accountability in those activities. Social audit strengthens downward accountability and

helps in prioritisation of voices of the poor and marginalised. Different stakeholders, like

community people (the primary beneficiaries), department officials, representatives of

implementing agencies, office bearers of the institution of local government etc.

participate in this audit.

Social audit is an important tool to promote accountability. Moreover; it promotes

participation of the people, transparency of the system and responsibility of different

stakeholders.




Transparency– Ensuring transparency in the administrative system and all its decisions

is an ideal situation that can be promoted through the social audit. Public institutions

can provide full access to all the relevant information to common people on a suo moto

basis.

Participation– Social audit provides space to all the affected persons, including their

representatives, to participate in all the phases of decision making and its validation.

Responsibility– Social audit increases a sense of ownership related to the activities,

along with participation in the processes that are being carried out for development.

Transparency

Participation

Accountability

Responsibility Social

Audit




This ownership ultimately increases the sense of responsibility of the community

members, before, during and after implementation of the projects.

Accountability– The ultimate objective of social audit is to enhance the level of

accountability among all stakeholders. This also demands and fixes accountability of the

elected representatives and government functionaries, along with the representatives of

implementing agencies. The community now has open access to all the information

regarding the consequences of the actions of these people that affect the intended

beneficiaries.

Social audit also works as a monitoring tool. Monitoring is defined as checking,

collecting and analysing information about a particular activity to improve the

performance and result of that activity. It also enables project managers and members

of the project team to take appropriate actions, so as to ensure the implementation of

project according to the action plan. The involvement of the community in the monitoring

process makes it more participatory. Social audit is a critical monitoring tool and can be

taken up at any point of time, during and after the completion of the activity, to assess

the end results of the activity.

Social audit can also be used as an evaluation tool. In general, the exercises related to

evaluation are conducted by external agencies to ensure the unbiased and objective

assessment of processes and outputs/outcomes. The involvement of local people in the

process makes the exercise participatory. Social audit carried out jointly by external

facilitators and by local communities could be termed as participatory evaluation.




Summary

We have seen the ways in which social audit can be an improvement upon conventional

audit methods, in, that it is more participatory, and hence more democratic. If the

developmental projects are initiated for intended beneficiaries, it is important that these

beneficiaries have a say over the audit of these projects.

Audits that are usually conducted by the government are inadequate because they

exclude the concerned people in most steps. Therefore, the people remain unaware of

details of the expenditure of money assigned for projects affecting their lives. Social

audit attempts to pull them into the gambit of the functioning of audits and transfer to

them a sense of ownership over the information collected.

Collaboration between the people and civil society groups like NGOs and CSOs,

providing people with the required skills to successfully conduct a social audit would

enhance the efficacy of the process.

Social audit then becomes a tool in the hands of the beneficiaries to monitor and

evaluate the schemes undertaken by the Government for their benefit. It, consequently,

pushes for systematic functioning without any manipulation on the part of the

Government.




References

Centre for environment concern (CEC). (2006). Report of social audit in ananthpur

district of Andhra Pradesh. Hyderabad: Unpublished.

Centre for good governance. (2005). Social audit: a toolkit (a guide for performance

improvement and outcome measurement). Hyderabad: Centre for good governance.

Ministry of law and justice. (2005). The gazette of india (extraordinary), no. 48, part ii-

section i, ‘the national rural employment guarantee act, 2005 (no. 42 of 2005. New

Delhi: Government of India.

PRIA. (2008). Rashtriya gramin rojgar guarantee yojana ke antargat samajik ankekshan

tatha samajik ankekshan me gram sabha ki bhumika. New Delhi: PRIA.

PRIA. (2008-09). Social audit: a resource kit. New Delhi: PRIA.

Documents

Appreciation Programme Participatory Social Audit: A Tool ...pria-academy.org/pdf/Module_I_Social_Audit_An_Introduction.pdf · social accountability, especially after independence